Dhaka Fareast Ltd.

The Impact of COVID-19 on Bangladesh’s Garment Industry



Bangladesh is one of the world’s largest garment exporters. It is also a major source of clothing for American retailers. For the past 25 years, it has been the major key source for foreign exchange. Now, it’s under a threat due to covid 19.  So, whether a small or large garment manufacturer is concerned about it.

In this blog,  the way covid 19 affected the Bangladesh garment industry has focused.

Small to medium garment factories are feared to get closed down

Due to the pandemic, orders have dropped as a result of the global decline in sales. As a result, small-scale clothing manufacturers have downed to their knees.

The shortage of work orders from retailers and manufacturers is severe. That makes many entrepreneurs seek buyers selling their businesses. Around 300 small and medium garment factories were about to shut down.  As a result of a $1 billion loss in yearly export value.

However, the large garment manufacturers are better to some extent. They have massive production facilities and capacity to deliver shipments on time. That creates stronger coping mechanisms to help them get orders.

Garment workers faced around 35% pay cut in their salary

Businesses react swiftly to the current situation. Yet, the coronavirus spread around the world in early 2020 and is still going on even in the mid of 2021. It causes a forced shutdown of thousands of garments manufacturing businesses in Bangladesh.

The garment industry in Bangladesh has suffered from market closures. Besides, halted shipments, delayed payments, and a liquidity crisis shattered even the leading Garment Factories in Bangladesh. During the month of lockdown Bangladeshi workers were forced to take a 35% wage reduction. Bangladesh apparel exports faced negative growth during corona

Reports came from Bangladesh Garment Manufacturers and Exporters Association (BGMEA). The order for over 900 million garments worth $2.9 billion had been canceled or about to be canceled.

The cancellation or suspension of most orders goes on till July. Already, the BKMEA has claimed that more than $3 billion has been wasted. A lack of demand from the US and European markets led to the closure of hundreds of stores. Due to the pandemic-centric shutdown orders were canceled. RMG exporters have appealed to the international world for help.  They appealed to save the country’s core garment manufacturers and traders.

RMG sector faced massive job loss

Any interruption in the RMG sector affects the nation’s economic progress. And jeopardize the socio-economic achievements made over the years. The drop in demand has already resulted in a large number of job losses. It is believed that it would exacerbate the country’s poverty. COVID-19 economic fallout causes 1 million Bangladeshi garment workers to lose their jobs. At least one-quarter of garment workers in Bangladesh have been sacked or suspended.

Final Words

The revival of economic activity depends on the RMG sector’s future. Especially from the rise in demand from Europe and the United States. Because these nations are still battling the virus’s spread. The prospect of them reviving their economies soon appears dismal. Industry analysts said the RMG sector would have to wait a long time to recover from the current crisis. Yet the garment manufacturer company in Bangladesh is still trying to improve their situation.

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